Union Budget 2024:
Shaping India's Future with Visionary Reforms
Union Budget 2024-25: Detailed Report
Explore I.P. Pasricha & Co (IPPC GROUP) detailed report on Union Budget 2024-25 and its impact on various sectors including budget key highlights, sector-specific insights, Section-wise Direct and Indirect Tax proposals and expert analysis. Gain valuable insights into the budget’s implications and strategic reforms.
We hope you find this analysis both informative and impactful.
WATCH LIVE BUDGET ANNOUNCEMENTS - #ViksitBharatBudget
BUDGET INSIGHTS
Agriculture
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
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Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- 52 lakh crore allotted for the agriculture and allied sectors to drive productivity and resilience in agriculture.
- Comprehensive review of the agriculture research infrastructure to prioritise productivity
- Introduction of 109 high-yielding and climate-resilient varieties of 32 field and horticulture
- Support to one crore farmers to facilitate the adoption of natural farming, through the implementation of certification and branding
- The government, in collaboration with the states, will support the rollout of the Digital Public Infrastructure (DPI) aiming to cover farmers and their lands within a span of three
- 10,000 need-based bio-input resource centres will be
Employment and Skilling
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
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Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- Introduction of three schemes — a) First Timers, b) Job creation in manufacturing, and c) Support to employers under the Prime Minister’s package aimed at boosting employment through incentives for both employees and
- Under a new skilling programme, 20 lakh youth will be skilled over a fiveyear period and 1,000 Industrial Training Institutes (ITIs) to be upgraded in five Additionally, one crore youth to be skilled by India’s top companies in five years.
- Revising the Model Skill Loan Scheme to facilitate loans up to 5 lakh.
- Financial support for loans upto INR10 lakh for higher education in domestic institutions for the youth who have not been eligible for any benefit under government schemes and
- Facilitate higher participation of women in the workforce through setting up of working women hostels in collaboration with industry and establishing
Infrastructure and Transportation
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
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Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- 4 per cent of GDP, i.e., INR11 lakh crore (approx.) has been allocated for the capital expenditure.
- Investment in infrastructure by private sector will be promoted through viability gap funding and enabling policies and regulations.
- Phase IV of PMGSY will be launched to provide all-weather connectivity to 25,000 rural
- Through Accelerated Irrigation Benefit Programme and other sources, government will provide financial support for projects with estimated cost of INR11,500 crore such as the Kosi-Mechi intra-state link, along with 20 other ongoing and new schemes including barrages, river pollution abatement and irrigation projects
Next Generation Reforms
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
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Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- The government plans to stimulate reforms to enhance the efficiency of production factors, markets, and sectors through various
- Digitalisation of urban land records will be undertaken with GIS
- Enhancements will be made to the Shram Suvidha and Samadhan portals to facilitate compliance for industry and
- Introduction of NPS-Vatsalya, a plan for contribution by parents and guardians for
- To boost ‘Ease of Doing Business’, the government is formulating the Jan Vishwas Bill 0.
Energy
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
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Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- Launch of PM Surya Ghar Muft Bijli Yojana for rooftop solar installations to provide 1 crore households obtain free electricity up to 300 units every
- Development of policies for pumped storage projects and nuclear energy
- Under the Viksit Bharat initiative, public-private partnerships will be fostered for the development of Bharat Small Reactors and new nuclear energy
R&D, Innovation
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
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Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- Anusandhan National Research Fund will be operationalised to support basic research and prototype Additionally, a financing pool of INR1 lakh crore will be established to encourage research and innovation led by the private sector on a commercial scale.
- To multiply the space economy to five times its current size over the next decade, an INR1,000 crore venture capital fund will be
Urban Development
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
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Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- Develop ‘Cities as Growth Hubs’ with states through economic planning and transit-oriented
- Ensure orderly Peri-urban growth in collaboration with
- Establish frameworks for creative brownfield redevelopment in existing
- Implement Transit Oriented Development plans for 14 large
- States will be urged to lower stamp duty rates for all and consider additional reductions for properties purchased by women, integral to urban development
- PM Awas Yojana Urban 0 aims to address housing needs of 1 crore urban poor and middle- class families with ₹10 lakh crore investment. A provision of interest subsidy to facilitate loans at affordable rates is also envisaged.
- Partnering with states and banks, government will promote water, sewage, and waste projects for 100 cities, integrating irrigation and tank
- Government plans to develop 100 weekly street food hubs annually in select cities, inspired by PM SVA Nidhi Scheme’s
Pharma and Life Sciences
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
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Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- Estimated PLI allocation for pharmaceutical industry for financial year (FY) 2024-25 shall be INR2,143 crores
- Abolishment of angel tax – a welcome move to the pharma ecosystem
- New medical colleges to be constructed in the state of Bihar
- Proposal to exempt customs duty on three more medicines for cancer treatment and reduction of BCD on x-ray tubes and flat panel detectors under the Phased Manufacturing Programme
- Sunset clause extended from 30 September 2024 to 31 March 2029 for goods falling under chapter 30 of first schedule of Customs tariff Act 1975, for supply under Patient Assistance Programme run by specified pharmaceutical companies
Gift IFSC
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
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Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- The budget has set a new course for GIFT City IFSC, aligning the tax treatment of Retail Schemes and Exchange Traded Fund (ETFs with Category III IFSC Alternate Investment Funds in India (AIFs), thus will attract global fund managers and boosting the fund management
- Additionally, IFSC Finance companies now enjoy an exemption from thin capitalisation rules, encouraging the establishment of Finance Companies and treasury
Start-Up
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
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Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- Angel Tax to be abolished with effect from assessment year 2025-26
- Sum paid by a company for the purchase of its own shares shall be treated as a dividend in the hands of shareholders and charged to income tax at applicable rates
- No deduction for expenses shall be available against such dividend income while determining income from other sources
- Entire cost of acquisition of the shares which have been bought back would generate a capital loss in the hands of the shareholder and available for set-off against other capital gains
- TDS rate on payments by e-commerce operators reduced from 1% to 1%
- Capital gains tax regime simplified as under:
- Only two holding periods – 12 months (for listed securities) and 24 months (for others)
- Tax rate for Long-term Capital Gains (LTCG) proposed at 5% on all categories of assets
- Tax rate for Short-term Capital Gains (STCG) on sale of listed shares (with payment of STT) proposed at 20%
- Indexation not available on cost of acquisition
Oil and gas
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
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Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- A policy paper will be released, outlining suitable energy transition strategies that harmonize the needs of employment, economic development, and environmental sustainability
- Corporate Tax rate for foreign companies reduced from 40% to 35%. This will result in a reduction of effective tax rate for non-residents operating in the Oil and Gas
- Additional goods have been included in Customs exemption entry for petroleum exploration operations (S No 404 of Notification no 50/2017-customs)
- The customs exemption under S No 403/ 404 (for petroleum exploration operations) is proposed to be extended till 31 March 2026 only
Manufacturing and MSMEs
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
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Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- Announcements of support measures for MSMEs including a credit guarantee scheme and new assessment models for credit
- Establishment of E-Commerce Export Hubs in partnership with the private
- Twelve industrial parks under the National Industrial Corridor Development Programme would be
- The Mudra loan limit increased to INR20 lakh from the existing INR10 lakh for entrepreneurs who have previously borrowed and successfully repaid loans under the ‘Tarun’
- Appropriate changes to the IBC, reforms and strengthening of the tribunal and appellate tribunals will be initiated to speed up insolvency
- The IBC has resolved more than 1,000 companies, resulting in direct recovery of over 3 lakh crore to creditors. In addition, 28,000 cases involving over INR10 lakh crore have been disposed of, even prior to admission.
- The services of the Centre for Processing Accelerated Corporate Exit (C-PACE) will be extended for voluntary closure of LLPs to reduce the closure
Human Resource Development & Social Justice
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
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Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- Three crore additional houses under the PM Awas Yojana in rural and urban areas in the country have been
- Enhancement of road and power projects, especially in eastern regions and states like Bihar and Andhra
- Formulated a plan ‘Purvodaya’ for the all-round development of the eastern region of the country covering Bihar, Jharkhand, West Bengal, Odisha and Andhra
- Launch of the Pradhan Mantri Janjatiya Unnat Gram Abhiyan by adopting saturation coverage for tribal families in tribal-majority villages and aspirational
- 66 lakh crore to be invested for rural upliftment including infrastructure.
- Support for the Polavaram Irrigation Project and other flood mitigation efforts.
Start-Up
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
Read Here
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- Angel Tax to be abolished with effect from assessment year 2025-26
- Sum paid by a company for the purchase of its own shares shall be treated as a dividend in the hands of shareholders and charged to income tax at applicable rates
- No deduction for expenses shall be available against such dividend income while determining income from other sources
- Entire cost of acquisition of the shares which have been bought back would generate a capital loss in the hands of the shareholder and available for set-off against other capital gains
- TDS rate on payments by e-commerce operators reduced from 1% to 1%
- Capital gains tax regime simplified as under:
- Only two holding periods – 12 months (for listed securities) and 24 months (for others)
- Tax rate for Long-term Capital Gains (LTCG) proposed at 5% on all categories of assets
- Tax rate for Short-term Capital Gains (STCG) on sale of listed shares (with payment of STT) proposed at 20%
- Indexation not available on cost of acquisition
Oil and gas
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
Read Here
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- A policy paper will be released, outlining suitable energy transition strategies that harmonize the needs of employment, economic development, and environmental sustainability
- Corporate Tax rate for foreign companies reduced from 40% to 35%. This will result in a reduction of effective tax rate for non-residents operating in the Oil and Gas
- Additional goods have been included in Customs exemption entry for petroleum exploration operations (S No 404 of Notification no 50/2017-customs)
- The customs exemption under S No 403/ 404 (for petroleum exploration operations) is proposed to be extended till 31 March 2026 only
Manufacturing and MSMEs
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
Read Here
Key Expectations from the Power Sector for the Upcoming Union Budget 2024 - 25 :
- Announcements of support measures for MSMEs including a credit guarantee scheme and new assessment models for credit
- Establishment of E-Commerce Export Hubs in partnership with the private
- Twelve industrial parks under the National Industrial Corridor Development Programme would be
- The Mudra loan limit increased to INR20 lakh from the existing INR10 lakh for entrepreneurs who have previously borrowed and successfully repaid loans under the ‘Tarun’
- Appropriate changes to the IBC, reforms and strengthening of the tribunal and appellate tribunals will be initiated to speed up insolvency
- The IBC has resolved more than 1,000 companies, resulting in direct recovery of over 3 lakh crore to creditors. In addition, 28,000 cases involving over INR10 lakh crore have been disposed of, even prior to admission.
- The services of the Centre for Processing Accelerated Corporate Exit (C-PACE) will be extended for voluntary closure of LLPs to reduce the closure
TAX IMPLICATIONS
Corporate Income tax rate
- No change in domestic tax rates
- Tax rate for foreign companies reduced from 40% to 35%
Rationalisation of withholding tax rates
- Reduction of withholding tax rates from 5% to 2% under certain provisions
Transfer Pricing
- No change in domestic tax rates
- Tax rate for foreign companies reduced from 40% to 35%
Simplification
- Angel tax abolished from 1 April 2024
- E-commerce equalisation levy of 2% applicable on the e-commerce supply or services has been withdrawn
- Comprehensive review of Income Tax Law, GST and custom rates
Vivad Se Vishwas Scheme 2024
- Introduction of Direct Tax Vivad se Vishwas Scheme, 2024 for providing a mechanism of settlement of disputed issues. Date of applicability of the proposed scheme is yet to be notified.
Amendment to Personal Tax - New Tax regime
- Standard deduction increased to INR 75,000 from INR 50,000
- Contribution to NPS – Increased from 10% to 14%; Deduction allowed in the hands of the employer and the employee
Reassessments
- Timeline for initiating re-assessment proceedings reduced from 10 years to 5 years 3 months where escaped amount is or likely to exceed INR 5 Million
- Block Search for 6 years reintroduced
GST
- Rationalisation/simplification of tax structure proposed
- Expansion to cover products currently outside GST’s ambit
- Council decisions implemented – Amnesty Scheme introduced; powers granted to regularise industry practice
Customs
- Rate rationalisation to promote Make in India vis.
- IT and electronics sector
- Medical equipment
- Renewable energy sector
- Extension of exemptions (for capital goods, parts) to support crucial supply chains
BUDGET BYTES
#Budget2024 #ViksitBharatBudget
▪️ Rationalization of taxation of Capital Gains
— PIB India (@PIB_India) July 24, 2024
➡️Short-term capital gains on specified financial assets shall be taxed at a rate of 20% instead of 15%
➡️Long-term capital gains on financial and non-financial assets will attract a tax rate of 12.5%.
(3/6)#UnionBudget2024… pic.twitter.com/EEYVKompKG
▪️Family pension deduction increased from Rs 15,000 to 25,000
— PIB India (@PIB_India) July 24, 2024
▪️ Amount of deduction permissible under section 80CCD proposed to be increased from 10% to 14% in the case of the non-government employer.
▪️Angel Tax Abolished
(2/6)#UnionBudget2024 #Budget2024 pic.twitter.com/weZEKYg0av
Secretary, Revenue, Shri Sanjay Malhotra along with Chairman, CBDT, Shri Ravi Agrawal, & Chairman,@cbic_india, Shri Sanjay Agrawal addressing an ‘Interactive session on Union Budget 2024-25’ organized by @ficci_india#UnionBudget2024 pic.twitter.com/EZIIM4sNOe
— Income Tax India (@IncomeTaxIndia) July 25, 2024
Chairman, CBDT, Shri Ravi Agrawal discussing at length the various Direct Tax proposals of the #UnionBudget2024 in his address to @theicai at Sirifort Auditorium.
— Income Tax India (@IncomeTaxIndia) July 24, 2024
Senior officers of the Income Tax Department from Tax Policy & Legislation division are also present. pic.twitter.com/ELJWVM8r6a
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